Bipartisan Budget Act and Medicare Part D Changes

Posted:February 26, 2018

Congress recently passed, and the President signed, the Bipartisan Budget Act. This Act contains significant health care provisions, including accelerating the closure of the Medicare Part D coverage gap in 2019 (rather than 2020), increasing the manufacturer coverage gap discount, and including biosimilars in the coverage gap discount program.

It is believed that these changes will have a direct impact on EGWPs:

Closing the Coverage Gap (also known as the Donut Hole) for brands and biosimilars:-The donut hole for brands and biosimilars will be closing in 2019, one year earlier, which brings the member cost share to 25% of the negotiated price, the plan cost share to 5%, and increases the manufacturer coverage gap discount from the current 50% to 70%.

Biosimilars classification:-Biosimilars will now be included in the coverage gap discount program in addition to brands.

IRMAA Premiums:
-Increase in percentage premium contributions from 80-85% for individuals earning $500,000 or more ($750,000 for couples).

It is believed that the Medicare Part D coverage gap provisions in the Bipartisan Budget Act will have a favorable impact on most EGWPs. These changes will be effective January 1, 2019.